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The payslip law changes you need to know about

If you provide payslips to your employees, did you know that from 6 April 2019 the law is changing about who you need to give payslips to and what information you have to include?

We take a look at the changes you need to know about and what steps to take to ensure you comply with the new legislation.

Key payslip law changes

Earlier this year, new legislation was passed with the aim of making it easier for employees to understand their pay. The key changes are:

Payslips for all employees

Currently, you only need to provide your permanent members of staff with payslips. From 6 April 2019, if you use agency staff, casual staff, contractors or zero-hours staff, then you will also need to start providing them with payslips.

Itemised payslips

Currently, your employees’ payslips should include the following information:

Their earnings before and after any deductions

The amount of deductions that change each time they’re paid, for example, tax and National Insurance

Any benefits they have taken out of their salary, such as childcare vouchers, season-ticket loans.

But from 6April 2019, you must provide all workers with fully itemised payslips. The payslip must either:

Show the combined number of hours worked for which payment is being made; or

Itemise the figures for different types of work worked and/or different rates of pay.

Why are they making these changes?

The new legislation is aimed at employees whose pay varies based on the number of hours they work i.e. agency staff, casual staff, contractors or zero-hours staff.

These changes will help ensure everyone understands how their pay is broken down and can clearly see what deductions have been made. This will make it a lot easier for them to:

Challenge their employer if they think their payslip is wrong;

Raise a case with the Advisory, Conciliation and Arbitration Service (ACAS);

Raise a case with HMRC if the National Minimum Wage hasn’t been paid.

In all these cases, the employee will be able to use their payslip as evidence

What you need to do next

With less than 6 months to go, it’s time to start taking steps to ensure that you comply with the updated legislation. To ensure a smooth transition, we recommend the following:

If you have a HR team, make sure they are aware of the changes and how to implement them.

Review your business and payroll processes

Configure your payroll to ensure that it can collect the additional information

Amend the format of your payslips to include this new information

It still doesn’t matter how your staff get their payslips; whether it’s by hand, by post or email, as long as they get them either before or on the day they get paid.

Running your own payroll can be stressful at the best of times, and these changes are going to potentially add to your workload.

If you need any help with payroll, then please get in touch. We offer a full payroll service, including setting up PAYE, running payroll on a basis to suit your company and producing